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Old 12-05-2008, 03:56 AM   #1
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Default $25 per barrel of oil possible in 2009

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Oil May Fall Below $25 Next Year, Merrill Lynch Says (Update1) By Grant Smith
http://www.bloomberg.com..oil

Quote:
Dec. 4 (Bloomberg) -- Crude oil may dip below $25 a barrel next year if the recession that’s slashing fuel demand around the world spreads to China, Merrill Lynch & Co. said.

Global oil demand will contract in 2009 as economic growth slows to its weakest since 1982, Merrill Commodity Strategist Francisco Blanch said in a report today. In October, when oil was around $100 a barrel, the bank predicted that prices may slide to $50. Crude traded at $45.30 in New York today, the lowest since February 2005.

“A temporary drop below $25 a barrel is possible if the global recession extends to China and significant non-OPEC cuts are required,” Blanch said. “In the short-run, global oil demand growth will likely take a further beating as banks continue to cut credit to consumers and corporations.”
Quote:
Merrill reiterated a Nov. 26 forecast that oil futures traded in New York will average $50 a barrel next year. Prices “could find a trough” at the end of the first quarter and undergo a “modest recovery” in the second half as economies strengthen, according to today’s report.
Quote:
Merrill’s $50-a-barrel assessment for 2009 is the second- lowest among 32 analyst estimates compiled by Bloomberg, after a prediction of $43.13 by ANZ Banking Group Ltd. issued on Nov. 18.
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Old 12-05-2008, 05:14 PM   #2
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Default Re: $25 per barrel of oil possible in 2009

Shame our dollar is so tied into the price of oil (and other commodities). As oil prices fall so does the loonie , compared to the US greenback . We're trying to do the math on a trip to the US southwest around Christmas, to see if the cheaper gas offsets the weaker Canadian dollar. We're just beginning to settle in at, or a little below, zero as our daytime high temperature around the Niagara area, so we may just go anyway to get to a warmer clime . We were thinking southern Arizona or Texas or thereabouts (maybe even California ).
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Old 12-06-2008, 03:08 AM   #3
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Default Re: $25 per barrel of oil possible in 2009

From CNN Dec 5, 2008

Quote:
The plummeting price of oil has sent the price of gasoline in the U.S. sliding more than $2 a gallon, as consumers and businesses cut back on expenses. Gas prices declined for the 79th day in a row Friday to a national average of $1.773 a gallon, according to motorist group AAA.
According to MS Streets & Trips 2007, if you get 15mpg, a drive from Niagara Falls to Phoenix, Arizona (3654 kilometers) - the cost for fuel is US$268.00 (CDN$340.00) with gas at US$1.77 per gallon.

I think that US$1.77 per gallon gas equals US$0.47 cents or CDN$0.60 cents per litre using todays exchange rate. Even with the $1.27 exchange rate, gas in the US costs less than gas here.
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Old 12-06-2008, 12:46 PM   #4
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Default Re: $25 per barrel of oil possible in 2009

I believe it's ALWAYS been cheaper in the U.S. for gas. Is that 15mpUSg? No matter how you slice it. I'm not 100% sure, but it seems to get cheaper as you approach the states (nearer the Gulf maybe?) with lots of refineries. Probaly due to less state lines to cross and have fewer shipping taxes added to the product? Perhaps someone from the US could comment on this (bold) assumption?
I always wondered what type of gallon the Roadtrek's mileage was based on in their estimates. I assumed it was per U.S. gallon.
We've actually averaged around 18 mpCg on the highway at 60mph on our first 2 trips with the Chevy 350CID engine
and the 123D transmission in the "D" position. I guess that would translate roughly to 15mpUSg, which is I think what they estimate in their brochures?

Still thinking about getting south. It snowed here overnight. Temp is -4C at 08:46 a.m.
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Old 12-07-2008, 03:41 AM   #5
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Default Re: $25 per barrel of oil possible in 2009

The way I just figured it out was at todays price of a litre .70 cents.
If I fill my 135 litre tank it would cost me $ 94.00 Canadian.
If I fill the same 35 gallon tank at a $1.70 US it would cost $59.50 x $1.25 exchange comes to $74.00 Canadian. I would therefore save $20.00 on a tank.
Hope I got that figured out right.
I always found gas cheaper in the US when travelling there, even with the exchange rate.
We are also thinking about going south at this rate.
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Old 12-07-2008, 01:48 PM   #6
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Default Re: $25 per barrel of oil possible in 2009

Sounds about right to me. A US gallon is about 3.8L where our Imperial is about 4.5L. At $1.70 per US gallon, they're paying about $0.45US/L. Times 135 litres (your tank size) is about $61 US. Times today's (actual from XE.COM) exchange rate of 1.27 is around $77 Cdn. I found it easier to convert price per gallon to price per litre (never thought I'd ever say that ), X 135 and then do the exchange rate calculation.
(Useful?) links to volume conversion and exchange rate tables....
http://www.onlineconversion.com/volume.htm
http://www.xe.com/ucc/
Again, no matter how you slice it, gas is cheaper in the States. God bless their little hearts.

Marko mentioned a fuel cost estimator on the software he used to do the calc for me from Niagara Falls to Phoenix AZ.
I tried the (new?) one built into Mapquest and it came up with roughly the same number (+ or - a dollar or two). Kinda useful, imho.

It's windy, cold, and snowy in Niagara right now.
My wife keeps looking at the weather network for temperatures at places along the Gulf coast of the US.

I think we'll be on our way sooner rather than later.......
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Old 12-11-2008, 03:14 PM   #7
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Default Re: $25 per barrel of oil possible in 2009

Apparently $20 per barrel is possible.

http://www.financialpost.com/story.html?id=1059758

Quote:
Philip Verleger, of the Haskayne School of Business in Calgary, said yesterday that oil could go to $20 a barrel as the economic slowdown drags on through the next year or more. Price recovery could take few years, before oil returns to "normal" levels.
I'm thinking about going to places that were previously too expensive because of the price of fuel to drive to. Now I just need to find the time to do it.
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Old 12-11-2008, 03:32 PM   #8
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Default Re: $25 per barrel of oil possible in 2009

I hear you on that one. Our biggest headache (still) is finding cat-sitting or a place to board them that won't cost more than our trip. We'd like to head south again, but we don't want to abuse the kindness of a friend who took care of the cats the first 2 trips. They just don't travel well, and my better half doesn't want to bring them along, although I think they'd get used to it over time. However, I'm overruled on that one (for now).
Actually, we might have to drive to Mexico to get any kind of decent/warmer weather. I just saw New Orleans covered in snow (first time since Dec. 25, 2004 apparently?). Wonder how the US southwest is weather-wise this time of year? Any Texans/New Mexicans/Californians/Nevadans/Arizonians care to comment ? Florida might be warmer, near The Keys, but we really like the southwest better.
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Old 12-11-2008, 09:05 PM   #9
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Default Re: $25 per barrel of oil possible in 2009

Houston "normally" is 62º on Christmas Day - of course it snowed here yesterday (Wed, 11 Dec) - dry and sunny today (Thurs) - temps around freezing overnight and in the mornings - afternoons = 40s
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Old 12-14-2008, 12:40 AM   #10
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Default Re: $25 per barrel of oil possible in 2009

Ok, how about $10 per barrell...............

Quote:
Oil May Crash to $10 a Barrel
Oil prices may crash as low as $10 a barrel, says Devina Mehra, chief strategist at First Global. She explains her extremely bearish outlook on oil, with CNBC's Martin Soong & Sri Jegarajah.
CNBC Video:
http://www.cnbc.com/id/15840232?video=960474937&play=1

Actually she says $10 to $30 in the interview.
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Old 12-14-2008, 04:47 PM   #11
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Default Re: $25 per barrel of oil possible in 2009

Quote:
I just saw New Orleans covered in snow (first time since Dec. 25, 2004 apparently?).
Not much by Ontario standards, but you know global warming and all that....
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Old 12-15-2008, 12:24 PM   #12
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Default Re: $25 per barrel of oil possible in 2009

Hey, Whiskyecho,
So it's normally around 62F on Christmas in Houston? Very nice indeed. Is there much difference between
your area temps and say Brownsville or Corpus Christi this time of year, or are you pretty much the same?
We were thinking about heading down your way later this month or early January.
Western/central Canada is experiencing (unusual) wind chills in the -40s right now and they're probably headed
our way soon enough.

Thanks for the info,
Mike.
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Old 12-15-2008, 01:09 PM   #13
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Default Re: $25 per barrel of oil possible in 2009

That Christmas Day "normal" temp of 62º was as reported by one of the Houston weather guys the other day..so..

I've looked-up (on the internet) the (historical) Jan & Feb highs and lows for Houston, Corpus and So Padre and they're as follows:

Houston: 63/45 & 67/48

Corpus: 65/45 & 69/49

So Padre: 67/52 & 70/54

In other words, it tends to get warmer by a 2-4 degrees as ya head South from Houston. This, of course, is "history" so it comes with a grain of salt (but I'd have to say that my R/Ts heat-pump could handle the Jan/Feb lows without me having to crank-up the furnace).

That said, if anyone is coming South thru the Amarillo area during those months, be sure to have you woolies, anti-freeze and tire chains with ya
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Old 12-15-2008, 06:43 PM   #14
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Default Re: $25 per barrel of oil possible in 2009

If you are looking for warmth, Florida is a bit closer to Niagara Falls and it is a hair over 80F today. Gas price this morning was $1.63/USG.

We are in the Fort Myers area and we find that the gas cost is a bit higher around here than in the rest of Florida, due, no doubt to the tourists.

Ontario is not all that cold today and it is raining!

Go for it!
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Old 12-15-2008, 07:48 PM   #15
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Default Re: $25 per barrel of oil possible in 2009

Whiskeyecho and Hallibagger,
Thanks both for the info. We still haven't decided which way to to go. I really like the southwest, and I'd love to have a look around Texas, but she likes the sounds of "a hair over 80F" and cheap(er?) gas. We were paying around $1.99/gal about a month ago when we were down there for the Endeavour launch. So, I have a feeling we'll be back in FLA before Christmas. She's working out the cat sitting plan as I type this. I used to work with a lady from Picton up until a few years back when I retired, and another fella from Napanee many years ago. Nice folks, both of them. On a completely different tack, my cousin's mother lives somewhere in the Ft. Myers area and he said as far as he knew, real estate down that way was not ridiculously overpriced. We did a bit of research online, and found some places that we thought might be nice to move to (some day, if we could work out the details of leaving Canada for FLA). We're both pretty tired of snow, and wind chill factors, and now the threat of mandatory winter tires (just heard on the radio, Ontario may consider following Quebec's lead), so we're seriously thinking about selling up in Ontario and moving south. I'd imagine there's a lot of homework to do before we put the 'for sale' sign on the lawn, but we're starting to look into it.

Mike.
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Old 12-16-2008, 06:01 PM   #16
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Default Re: $25 per barrel of oil possible in 2009

Hi Mike,
It's 82 or 83F in the Ft Myers area at the moment, gas is still $1.63 at Shell, Pilot and Wal Mart.

On the Real Estate front this area is mostly old money and the mortgages are mostly paid off. The housing bargains from the sub-prime mortgage fiasco are probably in the Cape Coral area where re-pos are quite high. However the Real Estate brokers seem to be buying the repos in 'lots' from the banks and are re-selling them. I guess you would have to know what you were doing in that kind of market.

As for living down here full time - you would have to seek expert advice from an Immigration lawyer. We have lots of friends who have homes down here but they are only here for 6 months. There was talk of the US government easing the 6 month stay restriction for retirees, but you would still have to take a close look at the medical costs etc.

I am not sure that I would enjoy the summers down here.

Keep on shovelling!
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Old 12-16-2008, 06:13 PM   #17
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Default Re: $25 per barrel of oil possible in 2009

From what I read today in the news, the oil companies are going to ruduce the oil output and force prices back up. Figures..

http://cnews.canoe.ca/CNEWS/World/20...765861-ap.html
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Old 12-17-2008, 12:21 AM   #18
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Default Re: $25 per barrel of oil possible in 2009

i don't feel too bad for the poor OPEC guys, that aren't making the money they were last July, when we were getting raked at the pumps. Still the root problem, imo, is the lack of refining capacity over here. We can get plenty of crude in, but the speed at which it's processed into gas and distillates is what keeps our pump prices high. And greed, of course.
I'd be happy with a $50-$60 barrel of oil and an $0.75-0.85C litre of gas. The higher oil price would help the Canadian economy get back on track, too.
On the brighter side our loonie closed above $.83 US today, so the exchange is a (tiny) bit better for us snowbirds $1US=$1.20C. Gas today in the Niagara region was about $.75C self serve and a penny or so higher for we serve.
$1.63 US sounds like a REAL bargain to me. That works out to about $.52C/litre. Bit of a drive to get it though !!!
80F + !!!!!! We're on our way, where's the RV park in Ft. Myers ?????
As for the real estate issue, we're in no rush to relocate and are still just newbies at the RVing game, so travel is our main concern right now. Just seeing new places across the continent, and occasionally making a mental note to hit the MLS sites when we get a chance, and check out prices in areas we think seem nice enough to consider for a more permanent home.
I think we'd rather take our chances in Florida and deal with the other issues like health care separately, after the fact, if we'll get to keep more of our nest egg, that my wife and I worked our whole lives to build up, because the cost of living seems to be lower in the US than it is up here (Mercer Cost of Living Survey 200.
I agree about hiring an immigration attorney at some point to assess the feasibility of a move to the US. I believe we'll do that after we get the travel bug out of our systems, in a year or two. There are all sorts of places to go and things to see across the continent. Maybe we'll change our minds and things will turn around in Ontario in that time and we'll stay put. You just never know, do you?

Jeez, did I write all that? Must be late, or I'm bored, or both.
Anyway, take care, enjoy the weather down there, we're supposed to get snow overnight up here, so the "keep on shoveling" comment is probably going to be true in a few hours.

Mike.
(previous political commentary/content removed by (me) the author - upon some reflection, deemed over the top on this forum - sorry, I get overly passionate about it sometimes - Mike.)
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Old 12-18-2008, 01:32 AM   #19
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Default Re: $25 per barrel of oil possible in 2009

Let it snow, let it snow, let it.....well, it did. For those of you enjoying the warmth of sunny southern climes, I wish we were there!!!!!
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Old 12-18-2008, 04:14 AM   #20
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Default Re: $25 per barrel of oil possible in 2009

I'd like to be somewhere south also

Your photo looks like what's going on here. -4c tonight and add -10c for wind chill factor.

re: crude oil

Quote:
Dec. 18 (Bloomberg) -- Crude oil traded near the lowest in more than four years on skepticism that OPEC’s larger-than- expected supply cut will be enough to boost prices as fuel demand drops.
http://www.bloomberg.com/apps/news?pid= ... 5C4dcsckK8

Quote:
“Worldwide demand for fuels is falling more than expectations,” said Ken Hasegawa, a commodity derivatives sales manager at Newedge Group in Japan. “The OPEC cut was much bigger than expected but it won’t be supportive for this market. This market can go down to $30.”

Crude oil for January delivery was at $39.84 a barrel, down 22 cents, at 12:14 p.m. Singapore time on the New York Mercantile Exchange. The contract earlier fell as much as 87 cents, or 2.2 percent, to $39.19 a barrel, the lowest since July 13, 2004.
Demand is dropping so fast companies are running out of storage space.

http://www.ft.com/cms/s/0/d5b82c16-cb11 ... 07658.html

Quote:
Oil companies and traders are storing at least 50m barrels of oil in supertankers - enough to meet France's oil imports for a month - in a clear sign of supply outstripping demand as the global economy slows.
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